Singing Together, But All Off Key

Written by John Schmitt

Wednesday, 31 August 2011 09:15

According to several conservative bloggers and columnists, back in the 1990s economist Alan Krueger (with his colleague David Card) wrote a "fatally flawed," "faulty," "tortured," and subsequently "disputed," "debunked," and "demolished" study on the employment impact of the 1992 increase in the New Jersey State minimum wage.

This 15-year-old research is in the news now because Krueger has just been nominated by the White House to the head of the Council of Economic Advisors. I wrote a long post yesterday responding to the wildly off-base criticisms of Krueger’s work made in a specific post at the National Review Online’s "The Corner," but I want to take up the issue again today because I am struck by a feature common to all of yesterday’s conservative outpouring on the Card and Krueger research.

Every one of these pieces mentions implicitly or explicitly (1) Card and Krueger’s 1994 study (pdf) based on a telephone survey of 410 fast-food restaurants, only to go on to claim that this work was later refuted by (2) Neumark and Wascher’s 1995 NBER working paper (which analyzed payroll data from a non-random sample of 235 fast-food payroll records). But, every one of these attacks on Card and Krueger is completely silent about, and in fact, appears to be completely ignorant of (3) Card and Krueger’s 2000 follow-up paper (pdf) published in the American Economic Review.

As I mentioned yesterday, the 2000 Card and Krueger paper offered a devastating critique of the 1995 Neumark and Wascher study (and of the updated version of Neumark and Wascher’s paper that was published in the American Economic Review alongside Card and Krueger’s 2000 paper). In particular, Card and Krueger demonstrated serious flaws in the data that were initially supplied to Neumark and Wascher by fast-food lobbyist Richard Berman.

More importantly, the 2000 Card and Krueger study also re-estimated the employment effects of the New Jersey minimum wage using government employment and earnings records for essentially every fast-food restaurant in the geographic areas covered by Card and Krueger’s original research. What every one of the conservative attacks on Krueger left out is that the administrative data vindicated Card and Krueger’s original findings and repudiated those of Neumark and Wascher.

A cynic might think that the folks writing these various attack pieces: had not actually read any of the studies that they were citing; were not even casually familiar with the academic debate that they were passing judgment on; and may have instead been relying on a highly selective version of events fed to them by people with a less than scientific interest in the outcome of the debate.